Starbucks to close 300 more stores, lay off 6,700 workers - What the heck is that supposed to mean? Are they sure?
Besides this ridiculous article below which I think is a bunch of crap I have a more pressing issue.... If SB closes here in Hawaii I will have to settle for crappy ole Seattles Best. UGH- YUCK- The CS there sucks!!! Sorry RC. What ever am I going to do? I don't know what life will be like if I can't get a triple grande truffle latte or a skinny vanilla latte or a triple grande non fat toffee nut latte.....Oh my lord- I might die - please don't even bother to offer first aid.....
This is truly sad news....
In its quarterly filing today, coffee behemoth Starbucks (SBUX) announced that it would close 300 underperforming stores -- including approximately 200 in the United States -- adding to the list of roughly 700 stores closed last summer.
In addition, some 6,700 "partners" will lose their jobs. Of these, 700 are at the corporate level.
These cuts won't come cheaply. The company figures $140 million for lease terminations, $60 million for asset write-offs (think old espresso machines), and $30 million for severance costs. Overall, these cuts are expected to save the company $100 million annually.
Frequent readers know these actions don't come as a big surprise, as an out-of-control growth strategy and weak product differentiation rammed right into an epic consumer-led recession and renewed competitive threats from McDonald's (MCD) and Dunkin' Donuts. While these actions will help right-size the company to this new economic environment, it does nothing to reinvigorate the brand, the product, or CEO Howard Shultz's image as a profitable yet philanthropic business leader.
Quarterly results were dismal, as expected. First-quarter revenue, which includes the 13 weeks to December 20, fell 6% to $2.6 billion. Earnings fell 69% to $64.3 million, or nine cents per share, down from $208 million, or 28 cents per share over the same period last year.
Starbucks plans to open 140 new stores in the U.S. this year, down from a previous target of 200 stores. International growth slows as well, with just 170 new stores planned instead of the 270 previously planned.
Looking into the future, UBS (UBS) analyst David Palmer optimistically believes the company can "successfully transition from a 'broken' growth story into a restructuring stock with upside." Palmer is looking for continues cost cutting and debt reduction which. I'll have more from Palmer, and a recap of Starbucks' conference call, so stay tuned.
In its quarterly filing today, coffee behemoth Starbucks (SBUX) announced that it would close 300 underperforming stores -- including approximately 200 in the United States -- adding to the list of roughly 700 stores closed last summer.
In addition, some 6,700 "partners" will lose their jobs. Of these, 700 are at the corporate level.
These cuts won't come cheaply. The company figures $140 million for lease terminations, $60 million for asset write-offs (think old espresso machines), and $30 million for severance costs. Overall, these cuts are expected to save the company $100 million annually.
Frequent readers know these actions don't come as a big surprise, as an out-of-control growth strategy and weak product differentiation rammed right into an epic consumer-led recession and renewed competitive threats from McDonald's (MCD) and Dunkin' Donuts. While these actions will help right-size the company to this new economic environment, it does nothing to reinvigorate the brand, the product, or CEO Howard Shultz's image as a profitable yet philanthropic business leader.
Quarterly results were dismal, as expected. First-quarter revenue, which includes the 13 weeks to December 20, fell 6% to $2.6 billion. Earnings fell 69% to $64.3 million, or nine cents per share, down from $208 million, or 28 cents per share over the same period last year.
Starbucks plans to open 140 new stores in the U.S. this year, down from a previous target of 200 stores. International growth slows as well, with just 170 new stores planned instead of the 270 previously planned.
Looking into the future, UBS (UBS) analyst David Palmer optimistically believes the company can "successfully transition from a 'broken' growth story into a restructuring stock with upside." Palmer is looking for continues cost cutting and debt reduction which. I'll have more from Palmer, and a recap of Starbucks' conference call, so stay tuned.
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